Finance & College OperationsPlanning & Budget Team

Important News About the Budget - January 11, 2013

Dear colleagues,

Happy New Year to all! I hope you enjoyed the holiday break and are ready for a rewarding winter quarter.

This morning Gov. Jerry Brown unveiled a budget proposal for 2013-14 that would increase investment in community colleges by nearly $200 million. This is exceedingly welcome news after several years of deep funding reductions! We will be carefully analyzing all aspects of this proposal, including the governor’s call for linking community college funding to student outcomes. As you know, the governor’s budget has a long path to travel through the Legislature, so it will be some months before we know with certainty what to expect in 2013-14. We’ll report more fully to you on our assessment, but for now you can see a summary of the governor’s full budget proposal at:

I’d also like to take this opportunity to update you on our progress toward closing the district’s structural budget deficit as we work to put this current era of cuts behind us. In this regard I have some good news to go along with our challenges.

We have determined that unless there are unexpected developments, we can delay from April until June 30 the position reductions needed to eliminate the district’s $5.7 million structural deficit. This would help make a difficult transition less disruptive and provide a few more months of employment for affected employees.

This delay appears possible based on two developments:

* Winter quarter enrollment is up slightly compared to earlier projections made in the fall. The colleges have added new course sections for 2012-13 in high-demand areas, and this rebuilding effort seems to be paying off. Growing our enrollment is one of the most important steps we can take to regain budget stability. Thank you, faculty and staff, for your efforts!

* A new analysis indicates the district can make it through 2012-13 without violating the state mandate that 50 percent of our spending be used to fund direct instruction. I’ve included more detail below about the 50 percent requirement.

As you know, our financial situation was improved considerably by passage of Proposition 30. Now, instead of having to address our worst-case scenario of $11.9 million in cuts in 2012-13, we are left with “only” our $5.7 million structural deficit, the legacy of successive years of deep state funding reductions and our own recent down turns in enrollments. We are able to offset this shortfall on a one-time basis this year using stability funds, but are moving to eliminate the structural deficit by reducing ongoing expenses before beginning the next fiscal year.

It is important to understand that money is not the only issue at play here. A key factor driving our decisions about layoffs and when they will take place is the 50 percent law requiring that half or more of all our spending go to direct instruction. (To learn more about this requirement, see

Because of our recent enrollment declines, we initially thought we would run afoul of the 50 percent law unless we cut some non-instructional positions this spring. But an in-depth analysis of spending patterns for the first half of the year suggests that we can postpone layoffs until the end of June and still meet the state’s 50 percent requirement if current assumptions do not change.

Several things are necessary for us to delay layoffs until June 30:

* We must continue to aggressively schedule classes and recruit and retain students for the winter and spring quarters to maximize enrollment (and instructional expenditures).

* By the same token, we must minimize non-instructional expenses until after June 30.

If we fall short on either, the district may be forced to implement layoffs before June 30.

Meetings with affected employees will begin at the end of the month, and the list of positions proposed for elimination will go before the Board of Trustees for action on March 4.

These reductions are a blow both for the individuals who will be leaving and for our district, which will be deprived of their participation and services. This is a significant loss of personnel and raises concerns about our continuing ability to maintain effective operations. I urge you to practice kindness and compassion, knowing that we are all doing the best we can under difficult circumstances.

Looking forward, California faces an estimated $1.9 billion budget shortfall in 2013-14 – relatively small compared to the past few years – and state budget surpluses are projected for the following years through 2017-18. Along with the governor’s 2013-14 budget proposal, this provides a good basis for optimism.